As the EU steps up its efforts to increase the spread of high-speed internet across Europe, the Commission and the incoming French Presidency yesterday (25 June) outlined their strategy to boost investment in Next Generation Access Networks (NGANs), the main infrastructure for broadband. Universal access to internet is a key priority for France.
Anticipating proposals expected before the summer, EU Information Society Commissioner Viviane Reding said yesterday that she is in favour of setting a “risk premium of around 15%” to reward operators investing in high-speed internet infrastructure.
Under the plans, companies investing in fibre networks would be able to charge extra fees to competitors wishing to use their infrastructure.
However, the Commisison remains divided on the issue and is still “discussing the final details” of the proposal, Reding said at a workshop organised in Brussels by ECTA, the trade association representing new telecoms operators.
Neelie Kroes, the commissioner in charge of competition policy, is particularly sceptical about Reding’s suggestion. “As of today, the Commission is not in a position to accurately quantify this risk premium,” Kroes said according to the FT, adding that it would be “counterproductive” to fix a single rate of return across the whole of Europe.
French EU Presidency to focus on social aspects
At the ECTA workshop, Emmanuel Gabla, the director of the IT section within the French Economics Ministry, underlined that NGNs are among the priorities of the French EU Presidency, which starts in July. He said France had already made a decision to equip every new house with fibre cables from 2012.
The French Presidency will also focus on the potentially negative social consequences of the prospective new investments. Indeed, uneven deployment of NGANs risks widening the digital divide, Gabla said. Universal access to broadband will therefore be a key target for France, he added.
The best model to invest in NGANs must still be found but Sweden is emerging as an example that could be replicated. With a demographic density of just two inhabitants per square kilometre in some areas, Sweden is now third in the world in terms of broadband penetration – after Japan and South Korea – thanks to equally shared public-private investments.
In the rest of Europe, it is clear that there will be a need for public money to cover remote zones but it is still not certain who in the private sector will bear the costs. A study released at the ECTA conference and prepared by WIK Consult underlines that incumbents have a structural competitive advantage in the nascent broadband services market. Therefore, it should be up to them to invest in the new networks, the study argued. But ETNO, the association which represents incumbents’ interests, dismissed the findings as premature.